How to Compare Student Loan Consolidation Rates
When you have student loans with a high-interest rate or payments are becoming difficult to make, consolidating your loans may be an option. In 2013, the average cost of college for a full-time student was $10,800, a 50% increase since 2001. Consolidating your loans consists of taking out one loan to pay off multiple loans. The main goal of consolidation is to get all your student loan debt into one account so you can pay it off at a much lower interest rate. With loan consolidation, there are two types of loans: secured and unsecured. Secured loans are usually related to an asset like a car, home or another piece of property while unsecured loans are based on your credit history and whether or not you are a high-risk borrower.
In 2013, the average cost of college for a full-time student was $10,800, a 50% increase since 2001.
Student loan consolidation rates are often lower than the rates for your private student loans and maybe even some of your Federal student loans which can allow you to save money by paying less in interest over time. Student loan consolidation interest rates may even be able to reduce your minimum payment
Choosing a Lender with the Best Student Loan Consolidation Rates
Just like student loan companies, there is a wide variety of student loan consolidation companies available to offer borrowers consolidated loans. We've done extensive research on some of the top loan consolidation companies in order to educate our readers about the pros, cons, and general offerings that each company provides.
When you're looking into consolidation, it's important to compare loan consolidation companies so you can secure the best possible option for your situation. This is why we have a student loan consolidation comparison tool to aid you. Our calculators help you compare important information like APR, origination fee, approximate monthly payment and more.
Federal Student Loan Consolidation
If you are considering federal loan consolidation you may be looking for simplicity if you have several loans that you are juggling along with another interest rate option. Most federal loans are eligible for consolidation including Direct Subsidized loans, Direct Unsubsidized loans, Federal Stafford loans, Direct PLUS loans, Supplemental Loans for Students (SLS), Federal Perkins loans and more.
You are generally able to consolidate right after your graduate, leave school or drop below half-time enrollment. You will not qualify for government student loan consolidation if you have private loans, but if you have a mixture of private and government loans, you can consolidate the government loans separately. When you consolidate federal student loans you will receive a variety of repayment options.
Student Loan Refinance vs. Consolidation
Considering refinancing as an option? Student loan refinancing can be a good option for graduates with high interest rates, unsubsidized federal loans, and private loans. When you apply to refinance your student loans, most banks and lenders will take some factors into account like your credit score, annual income, and possible bank statements for your checking and savings account.
Similar to consolidation, refinancing student loans allows a borrower to combine multiple loans into one loan. When you apply, you will have to comply with new terms and a new rate that may be determined by your creditworthiness. If your financial situation has improved, you may be able to take advantage of a lower interest rate and/or monthly payment.
With refinancing, you can also choose a variable interest loan, which could allow you to have a lower interest rate initially but it would be subject to fluctuate at any time.
Unlike consolidation, refinancing is only an option with private lenders. If you have Federal loans, you can refinance your student loans but you will sign a new agreement with a private lender and you will no longer be eligible for government relief programs like deferment, student loan forgiveness, and income-driven repayment plans.
Student Loan Debt Relief Options
When considering student loan debt relief, it's important to thoroughly understand all your options so you can make an informed decision as to how you will get a hold on your loan payments. If you are having a hard time paying off your debt and you have federal student loans, you can consider deferment or forbearance. There is also student loan forgiveness programs for federal loan holders, only most programs take several years to forgive your loans and you must meet specific requirements like making at least 120 qualified payments on a qualified loan and have an employer that is funded by the government.
If you don't have federal student loans and still need relief, consolidate your student loan debt.
Best Student Loan Consolidation Rates
Finding the right bank or lender to consolidate your loans can be confusing. The best way to consolidate your loans is by choosing a company that offers you the best rate and term. You can compare.
Some top companies that offer the best consolidation loans include: SoFi, CommonBond and LendKey to name a few. SoFi is a marketplace lender specializing in student loan refinancing, loan consolidation and personal loans. SoFi offers a wide range of rates and terms to meet your needs and they don't require any origination or prepayment penalties.
CommonBond saves borrowers around $14,000 when they refinance or consolidate their loans. They also provide free quotes and competitive rates as low as 2.13%
Student Loan Consolidation Rate Calculator
Our student loan consolidation calculator also acts as a student loan consolidation calculator to help you determine what your monthly payments will look like when you refinance or consolidate your loans. Within seconds you can enter quick information like your current loan balance, interest rate and loan term along with information regarding a new loan if you were to consolidate or refinance your loans to compare the savings.
One of the main reasons people choose to consolidate their loans is to save money in interest. Our smart calculator is a tool that helps you pinpoint exactly how much you can save so you can make the final decision as to whether or not you'd like to pursue consolidation or refinancing offers.
Feel free to try the tool out for yourself and if you need more information about student loan consolidation we encourage you to check out our FAQ section and our advice column to learn more answers to your questions.